Nokia Corporation (ADR)(NYSE:NOK) has offered Voluntary retirement scheme (VRS) to its employees working in Chennai plant in India as the company is struggling with the tax allegations, and has, also, agreed upon April 30th deadline to transfer the factory to the Microsoft Corporation (NASDAQ:MSFT).
No mention of number of employees for VRS
In its statement, the Finnish company said that Nokia Corporation (ADR)(NYSE:NOK) is a global company and it consistently review the manufacturing strategy adopted to ensure smooth and timely delivery of its products. It said that the process involves more than one factor like predictability and stability of the regulatory environment in the country where the company holds its operation.
“Following such a review, we can confirm we have launched a voluntary package (VRS) at our Chennai, India facility,” the statement said.
There are more than 6,000 employees in the factory; making it one of the largest factories of Nokia Corporation (ADR)(NYSE:NOK) worldwide. However, around 2,000 employees went on a one-day hunger strike couple of weeks ago to get better job security. There was no confirmation from the company over the number of employees opting for VRS, but said that every employee who demands it will be granted one.
“As a responsible employer, Nokia is offering a clear financial option for interested factory employees,” it added.
Need to settle dispute for concluding the deal
Back in March, Indian government ordered Nokia Corporation (ADR)(NYSE:NOK) to pay INR 35 billion ($572.5m, £342.4m) as a guarantee for tax that the company is due to pay. The phone maker has not yet given its nod to the demand, but if the amount is not paid then transfer of the factory to Microsoft may be restricted, which is the part of its M&A deal with the software giant.
A report from IDC research, a few months back, stated that mega-markets of China and India along with certain other geographies of Asia Pacific region are major growth drivers for Microsoft success in the mobile device industry, which it recently acquired from Nokia Corporation (ADR)(NYSE:NOK). China is the top most market for Lumia shipments and India is second. Vietnam ranks eight followed by Thailand which is 10th on the global ranking, according to IDC.
